By John Moses
The Central Bank of Nigeria (CBN) has directed all banks facing capital shortfalls to file detailed Capital Restoration Plans by Monday, 14 July 2025, as the regulator winds down special pandemic-era loan relief measures.
In a circular dated 20 June 2025, signed by Dr Olubukola Akinwunmi, Director of Banking Supervision, the CBN confirmed that all regulatory forbearance and waivers introduced during the COVID-19 crisis would formally conclude on 30 June 2025. Banks with capital deficits have been given 10 working days from that date to submit plans outlining strategies to return to full compliance.
The CBN specified that banks must immediately align their credit exposures with existing prudential standards. To help clean up asset quality, the regulator is allowing the instant write-off of fully provisioned loans affected by the forbearance regime, bypassing the usual one-year retention rule. This aims to bring down non-performing loan (NPL) ratios.
Additionally, in a move designed to temporarily boost capital adequacy, the CBN announced the removal of regulatory caps on recognising Additional Tier 1 (AT1) capital in Capital Adequacy Ratio (CAR) calculations from 30 June 2025 until 31 March 2026. The bank clarified this step is purely transitional and does not replace the broader recapitalisation programme launched in March 2024.
Other restrictions introduced earlier, including a freeze on dividend payments, director bonuses, and investments in foreign subsidiaries, will remain until banks fully restore capital and provisioning levels.
Starting from 30 June 2025, all banks must also provide quarterly disclosures covering credit exposure reconciliations, detailed provisioning data, CAR calculations with and without transitional relief, and complete disclosures on AT1 instruments.
The CBN has set a strict timeline: submissions must reach the Director of Banking Supervision within 10 working days of each quarter’s end, with the first reports due by 14 July 2025.
The Capital Restoration Plans should outline comprehensive measures such as cost-cutting strategies, risk asset reduction, significant risk transfers, and broader business model adjustments. Each plan will undergo regulatory scrutiny and serve as the foundation for ongoing supervisory engagement until banks fully restore capital strength and asset quality.
